The following information is from the accounting records of Wescott Office Supplies, Inc., for the fiscal years 2011 and 2010:
|
Assets |
2011 |
2010 |
|
Cash |
$ 66,250 |
$ 61,000 |
|
Accounts receivable, net |
84,000 |
42,000 |
|
Merchandise inventory |
42,000 |
48,250 |
|
Prepaid expenses |
7,875 |
12,125 |
|
Land |
94,500 |
78,750 |
|
Buildings |
1,99,500 |
1,47,000 |
|
Accumulated depreciation – buildings |
-31,500 |
-26,250 |
|
Equipment |
2,57,250 |
2,10,000 |
|
Accumulated depreciation- equipment |
-78,750 |
-63,000 |
|
Total assets |
$641,125 |
$509,875 |
|
Liabilities and stockholders” equity |
||
|
Accounts payable |
$73,500 |
$ 47,250 |
|
Accrued liabilities payable |
50,500 |
55,750 |
|
Five-year note payable |
52,500 |
-0- |
|
Capital stock -$50 par |
4,20,000 |
3,67,500 |
|
Retained earnings |
39,375 |
|
|
Total liabilities and stockholders” equity |
$641,125 |
$509,875 |
Net income for year ended 2011 June 30, was USD 56,250.
Additional land was acquired for cash, USD 15,750.
No equipment or building retirements occurred during the year.
Equipment was purchased for cash, USD 47,250.
The five-year note for USD 52,500 was issued to pay for a building erected on land leased by the company. Stock was issued at par for cash, USD 52,500.
Dividends declared and paid were USD 51,000. The company paid interest of USD 10,000 and income taxes of USD 40,000.
a. Prepare a working paper for a statement of cash flows.
b. Prepare a statement of cash flows under the indirect method. Also prepare any necessary supplemental schedule(s).